Investor Tool
1031 Exchange Comparison
Three paths, one property. This tool helps you compare keep, exchange, and sell outright side by side so you can see the real numbers behind each decision.
This is an educational estimate, not tax or investment advice. Consult a CPA and a Qualified Intermediary before making a decision.
How It Works
A 1031 Exchange Lets You Defer Capital Gains
When you sell an investment property, you typically owe capital gains tax and depreciation recapture on the sale. A 1031 exchange allows you to defer those taxes by reinvesting the proceeds into a like-kind replacement property. The rules are precise, but the financial benefit can be substantial.
Qualified Intermediary
You never touch the proceeds from the sale. A Qualified Intermediary holds the funds in trust until you close on the replacement property. Touching the money yourself makes the exchange taxable.
45 Days to Identify
You have 45 calendar days from the closing date of your sold property to identify potential replacement properties. You can identify up to three properties regardless of their value.
180 Days to Close
You must close on the replacement property within 180 calendar days of the original sale. Both the replacement value and the equity reinvested must meet IRS requirements to fully defer the tax.
Why this matters
The tax deferral from a 1031 exchange keeps more of your equity working for you in a new property. Over time, you can build significantly more wealth by deferring taxes through multiple exchanges. This tool shows you the numbers for each path.
Compare Your Options
Your Property, Three Futures
Enter your current rental property details below. The calculator will show you how each path compares on cash flow, equity, and tax impact.
Your Comparison
Here is how your three options compare
Path 1
Keep As-Is
Continue renting your current property
Monthly Cash Flow
$0
Current Equity
$0
Est. Tax Owed If Sold Later
$0
Capital gains + depreciation recapture
Property continues as-is. You keep collecting rent and the tax liability grows each year.
Path 2
Sell + 1031 Exchange
Reinvest into a replacement property
Equity Available to Reinvest
$0
Projected Monthly Cash Flow
$0
On estimated replacement property
Tax Deferred
$0
This is the amount you do not pay today
Full equity stays invested. Capital gains and depreciation recapture are deferred. You must identify replacement property within 45 days and close within 180 days.
Path 3
Sell, No Exchange
Cash out and pay the taxes
Gross Proceeds
$0
Net Cash After All Tax
$0
Baseline for comparison
Total Tax Paid
$0
Loss to capital gains + recapture
Clean exit. You walk away with the remaining equity after taxes, but you pay capital gains and depreciation recapture on the sale.
Want to talk through your options?
A 1031 exchange is a powerful tool, but the timeline is tight and the rules are precise. Let's discuss your situation and connect you with a Qualified Intermediary.
Book a ConversationNo pressure. Just a thoughtful conversation about your investment strategy.
Not ready to decide yet? That's fine. Explore other tools for investors, or book a conversation to learn more about how 1031 exchanges work in practice.
Want help with your numbers? Let's talk.
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Important Note
This is an educational estimate, not tax or investment advice. Consult a CPA and a Qualified Intermediary before making a decision.
- This tool does not model state capital gains taxes, the Net Investment Income Tax (3.8%), or alternative minimum tax scenarios
- Depreciation recapture is estimated using straight-line method at 25%. Actual recapture depends on your depreciation history and any prior cost segregation studies
- Replacement property cash flow projections are estimates based on typical cap rates and expenses in the Lake Houston area. Actual results will vary
- The 1031 exchange requires a Qualified Intermediary, a 45-day identification period, and a 180-day close deadline. Consult a tax professional for the specific rules that apply to your situation
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